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  • #2,861
  • Aug 21, 2012 7:42am Aug 21, 2012 7:42am
Quoting Balhana
Sold AU at 1.0515
Closed 2/3 at 1.0490 for +50 pips.
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  • #2,862
  • Aug 21, 2012 7:49am Aug 21, 2012 7:49am
Quoting lovejoy80
I was going to short here, but cancelled my order and waiting for PA - I don't have a good gut feel about going against this Euro charge right now, market generally feels rather thin on volume this week - first time this summer that I've thought this so being a bit cautious.
Took one lot only. SL is now at 99.20.....
  • #2,863
  • Aug 21, 2012 7:53am Aug 21, 2012 7:53am
Quoting 5.25
Quick 5min scalp on eurusd: breakout, retest, FTB entry. Good aggressive move into the level. Exit at FLR for approx. 1R.
Another LTF FTB setup, only I missed this one. Should've placed a buy order.

Went straight to the FLR with the aggressive stop hunt signature prior to entry.
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  • #2,864
  • Aug 21, 2012 8:21am Aug 21, 2012 8:21am
Quoting Balhana
Closed 2/3 at 1.0490 for +50 pips.
Nice one on AU.

We spoke about this one this morning in the TR - where would I be looking to short from, why and what would I be looking for (within this supply zone).

This is also a good example to highlight the usage of multiple TF's to gather information, like I said previously, TF's for me are used to gather information, with each TF having the ability to reveal something hidden on another TF (especially the case as you scroll down the TF's i.e. a lower TF revealing something hidden on a higher TF).

This is one method I employ when a) the exact supply is not obvious on a higher TF, b) where the setup is not an FTB or not one I want to trade via a TT and c) it is on a pair I follows closely (i.e. I would not go through this on a cross pair).

Annotated charts below go through the process of gathering information from each TF and what the conclusion would be.

In short I want to look for:

1. levels / points within the supply where price has broken previous demand.
2. levels / points within the supply where price has broken previous demand and immediately retested this (i.e. demand turned supply).
3. highlight the above areas for which price has moved away with strong momentum - indicating a strong supply / demand imbalance.

This gives me further information as to where I can 'expect' supply to be located (nothing of course is ever 100%) and where exactly to be looking for price action for a potential short. The actual price action I would look for will be the subject of a follow up post.
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  • #2,865
  • Aug 21, 2012 8:23am Aug 21, 2012 8:23am
The result when price first retraced back to this area is as per the charts below.

I'll do a follow up post at some point on what price action I would be looking for in order to take a short trade at these identified locations.
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  • #2,866
  • Aug 21, 2012 8:29am Aug 21, 2012 8:29am
Quoting Balhana
Took one lot only. SL is now at 99.20.....
Added one more at 98.95
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  • #2,867
  • Aug 21, 2012 8:33am Aug 21, 2012 8:33am
Quoting Balhana
Added one more at 98.95
Similarly -
Short @9893.5 s/l 9915
No more DOH! trades
  • #2,868
  • Aug 21, 2012 8:38am Aug 21, 2012 8:38am
Quoting Balhana
Closed 2/3 at 1.0490 for +50 pips.
Rest of AU got stopped out at BE+1.
  • #2,869
  • Aug 21, 2012 8:41am Aug 21, 2012 8:41am
Quoting nonethewisa
Similarly -
Short @9893.5 s/l 9915
Just noticed that we have already exceeded average daily range so i dont expect much more movement on this one today so am out at BE...i wished id of checked first...DOH!

Actually scratch that im talking rubbish, if it drops as im sure it will then that wouldnt affect the ADR - but im still out all the same. Prime example of muddled thinking when trying to look at too many charts!
No more DOH! trades
  • #2,870
  • Aug 21, 2012 8:50am Aug 21, 2012 8:50am
Quoting nonethewisa
Just noticed that we have already exceeded average daily range so i dont expect much more movement on this one today so am out at BE...i wished id of checked first...DOH!

Actually scratch that im talking rubbish, if it drops as im sure it will then that wouldnt affect the ADR - but im still out all the same. Prime example of muddled thinking when trying to look at too many charts!
I only read your first sentence when glancing and was about to say the same thing

If you were looking at a long setup and price was past its ADR would you not take the setup?
  • #2,871
  • Aug 21, 2012 9:13am Aug 21, 2012 9:13am
Mark, gotta question about my ozzie scalptrade, I sold ozzie at the 10m-supply with the red arrow. I zoomed into the 1m-TF to find an optimal entry, the decision point at the lower dotted red line was my touch entry but price went to the upper dotted red line before droping. Could you shed some light on why price wanted to visit that upper decision point, thanx
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Pipcrawler
  • #2,872
  • Aug 21, 2012 9:16am Aug 21, 2012 9:16am
Quoting lovejoy80
Nice one on AU.

We spoke about this one this morning in the TR - where would I be looking to short from, why and what would I be looking for (within this supply zone).

This is also a good example to highlight the usage of multiple TF's to gather information, like I said previously, TF's for me are used to gather information, with each TF having the ability to reveal something hidden on another TF (especially the case as you scroll down the TF's i.e. a lower TF revealing something hidden on a higher TF).

This is one method I employ when...
Price has since reacted of another supply point I'd marked (I actually overlooked something in regard to this one I realised) and I went short when price closed below the edge of the zone (i.e. 1.0514) on M5 TF.
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  • #2,873
  • Aug 21, 2012 9:17am Aug 21, 2012 9:17am
Quoting lovejoy80
I only read your first sentence when glancing and was about to say the same thing

If you were looking at a long setup and price was past its ADR would you not take the setup?
I have to be honest and say that I'd probably err on the side of caution and look at the position again the following day and if all that had occurred was sideways motion then id look for an entry. But i do realise that there are going to be a number of trades that id miss out on by using the ADR as a guide.
No more DOH! trades
  • #2,874
  • Aug 21, 2012 9:25am Aug 21, 2012 9:25am
Quoting lovejoy80
Price has since reacted of another supply point I'd marked (I actually overlooked something in regard to this one I realised) and I went short when price closed below the edge of the zone (i.e. 1.0514) on M5 TF.
5min chart explaining true price action.
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  • #2,875
  • Aug 21, 2012 9:31am Aug 21, 2012 9:31am
Quoting lovejoy80
5min chart explaining true price action.
Watching this trade very closely - equities soaring to new highs and AUD under-performing across the board is a sign of a screwed up market!
  • #2,876
  • Aug 21, 2012 9:46am Aug 21, 2012 9:46am
Sold EUR/CAD at 1.2281
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  • #2,877
  • Aug 21, 2012 9:53am Aug 21, 2012 9:53am
Quoting lovejoy80
Watching this trade very closely - equities soaring to new highs and AUD under-performing across the board is a sign of a screwed up market!
Not hanging around with this, out for just over 1R.
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  • #2,878
  • Aug 21, 2012 10:34am Aug 21, 2012 10:34am
Quoting xmzhang
Mark, gotta question about my ozzie scalptrade, I sold ozzie at the 10m-supply with the red arrow. I zoomed into the 1m-TF to find an optimal entry, the decision point at the lower dotted red line was my touch entry but price went to the upper dotted red line before droping. Could you shed some light on why price wanted to visit that upper decision point, thanx
In short there is not a hard definitive answer (IMO). But here are some general thoughts as to why (potentially) it didn't act as supply / resistance.

1. Washed Out SR Flip Zone

When are looking at SD zones as per my previous posts on AU were are looking for those broken demand / support (in a supply zone) and preferably immediate retests to confirm a supply / demand imbalance has occurred. This was definitely formed demand that was broken - in fact its an SR flip zone.

Now because it's a flip zone (and it's been flipped a fair few times in very recent history) it gets weaker - I use the term 'washed out' for an SR zone that has acted as both support and resistance multiple times over a relatively quick time period. If it can't hold price as one or the other (i.e. support or resistance) for a sustained period then it's becoming weaker i.e. it's influence as a flip zone is decreasing rapidly. This is definitely occurring in this instance as per my chart below.

2. HTF Picture

The location of this SD zone is of course within the H1 supply zone I was talking about earlier. Thus I would not lose sight of this picture and the key levels I'd identified earlier.

In this case the edge of that zone (lowest black line) is a much more important level that that SR flip zone because it's part of the bigger picture and defines whether price has had a breakout (lower) from that HTF zone.

3. Strength of Supply

Following on from how we define an SD zone and the levels we look at within the zone we have to remember that this does not tell us the whole story - hence why FTB's (like everything else) do not work 100% of the time.

For example - price moving away from an SD zone with large momentum tells us that there was an SD imbalance that originated within the zone. BUT it does NOT tells us the strength of the supply that was needed to overcome demand - for all we know demand could have been very weak and thus the supply was (relative) not that strong.

But we don't know this information so we have to base decisions on the information we have and that is that price moving strongly away from a clear zone represents an SD imbalance and if price returns in a certain way the likelihood of that same imbalance existing again is high.

Lastly, the market is not static it is ever changing (in terms of orders) - just because an SD imbalance occurred previously doesn't mean that same imbalance will occur again i.e. that the same players are placing the same orders again - orders are added and removed based on how a particular participant is viewing the market right now etc.

For example if we'd have AUD interest rate decision and price was sitting just below that H1 Supply zone - say they raised interest rated (unexpectedly) - there is not a chance that price would be capped by that supply it would blow straight through it - news causes sentiment changes (or more accurately has the potential to) which causes market participants to change their view point and thus their orders.
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  • #2,879
  • Aug 21, 2012 11:23am Aug 21, 2012 11:23am
Quoting nonethewisa
I have to be honest and say that I'd probably err on the side of caution and look at the position again the following day and if all that had occurred was sideways motion then id look for an entry. But i do realise that there are going to be a number of trades that id miss out on by using the ADR as a guide.
I'm not keen on using lagging indicators to guide me as to whether the market is due a pull-back for the day - I certainly wouldn't let it stop me taking a trade.

The markets do have mean reversion elements to them for sure, but I feel an indicator creates the wrong mindset as all an indicator is telling you is an average and absolutely nothing about what is happening right now. Price is a leading indicator, the ADR is a lagging indicator and has minimal (if any) predictive abilities.

Of course because it is an average it means the range will be higher and lower than the average on many an occasion.

As I told someone recently...anyone using an ADR as a basis of a market being oversold / overbought would have been wiped out during 2008.

Using it as a guide can be helpful (though I don't think it's needed) for some, but using it to base trading decisions around is IMO illogical.
  • #2,880
  • Aug 21, 2012 6:24pm Aug 21, 2012 6:24pm
Quoting Balhana
Added one more at 98.95
Closed the first entry at BE and the second entry at 98.73 for +22 pips. Leaving the third entry (@ 99.00) to run.
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